Inflated fees for a child receiving 15 hours of "free" entitlement

[moniuhna]

My son will soon be eligible for the government funding for 3-4-year-olds and the nursery he goes to takes part in the scheme. When I look at their fees I've discovered that even though they say he will receive the "free" hours (12 in any week as he is in the nursery only for two days), they inflate his hourly rates from £5.8 (paid by non-funded children) to £7.50 for any other hour above that so in fact we end up feeling they top-up his "free" hours by doing that. They claim that they do not operate on hourly basis but I calculate that if their daily fee is £58 for 10 hours of childcare then it comes to £5.8/hour but they don't accept this and say I can't calculate it this way. They say they only charge monthly and that the fee reflects the needs of the business. And in fact they can't tell me why I am charged more than I should as "businesses do not need to tell why they operate in the way they operate". Is this a common practice? Do I stand any chance challenging that or is there a loophole allowing them to do so?

Do you really want to take them to task on this? I suspect that they are quite entitled to rescind your sons place if it becomes too troublesome for them. In reality they are just trying to make an underfunded government scheme work.

But is it really underfunded? Or is it just that private settings inflate their costs to look so miserable and "underfunded" and therefore charging working parents even more to increase their profits? How do you know the £3.74 from the LAs do not really cover the costs of an hour of a bit of singing, dancing and crafting for one child? Obviously they do not hire twenty employees for a group of twenty 3-year-olds! And this does not even include drinks, snacks, bedding etc.

Just send them for the free sessions then like the other parents do
Obviously you will then have to pay for wraparound care from a different provider but you might feel less hard done by

moniuhna my dd is at a state not private nursery but it works the same, we even have to make a compulsory voluntary contribution (yes I know that is a contradiction but if you saw how it was done you'd understand) without the wrap around care that they provide which raises extra funds then they simply wouldn't be able to do all that they do with them. They provide childcare from 2 and have some 2 year olds who get the free places and some who are fully paid for. For full time care the private nursery works out cheaper.

They don't just pay the nursery worker though for every nursery there will be a manager and senior staff, cleaners, cooks. Huge running costs to cover other expenses if part of chain, training first aid child protection health n safety course. Sick pay and holidays pensions national insurence and tax. Rent heating water council tax. Toys and equipment. Pulblic liability insurances, food and snacks. Turnover for empty spaces when all free places are not taken in school holidays. Anyone know any nursery manager millionaires?

I'm a childminder. I charge £5.50 per hour. I have a funded child and my local authority pay me £4.15 per hour. This is not enough for my business to remain viable. I charge the child's parents for extras such as food, trips, craft materials etc which were included in my £5.50 rate. This tops my earnings up to the correct level. The child's parents are happy with this approach. I'm not allowed to charge any extra hourly fee for the funded 15 hours but I am allowed to charge what I want for any extra hours or extra costs.
I work alone and generally look after 2 preschool age children at a time. I simply can not afford to have one of those children pay less than the others.
Also, my "term" started on 4th January but I am still waiting for the LA to pay me. Apparently though the LA think this is acceptable too.
The real difficulty will happen if the funded 30 hours comes in. There won't be many extra hours to charge a higher rate for. The harsh reality is that many nurseries or childminders will either go bust or actually have to refuse to take funded children.

Don't look at it per hour a it doesn't work like that.
Do your daily rate - £58 takeaway the government free hours allowance (think it's about £10 for 3 hours. That means you should ten pay £48 per day.
Will you be paying that much?? I doubt it!

Plus you said it yourself that the government funding doesn't cover food and wipes and bedding etc. That's all got to be paid for somehow.

Have you heard of overheads, OP?!

The Playschool mine went to charged £10 for the 3 hour session. We are in Wales so only get 10 hours a week as can only use 2 hours per day even if you only go 2 days. Government funding was £6.50 a session so we then had to pay £3.50 per session on top of our funding. It's the normal rate take away the amount of fundin rather than simply making 6 hours free.
If you went to a cheaper nursery then probably your free hours would actually be free but no business is going to take children only paying £3 an hour via the government over children paying £6 an hour. Thier charges are thier charges it doesn't miraculously become cheaper to run a nursery just because the government are only giving them £3 an hour

well, the nursery could lower their rates but they wouldnt ba able to balance the books and then they would have to close and where would you send your child then?
what the government give for the 15 hours is nowhere enough to provide a decent service
and god knows what will happen when they bring in 3o hours free
i expect lots of nurseries will have to close as they wont be able to sustain themselves

They're not charging more per hour. They charge a daily rate and it's a premium rate for anyone taking less than a day. They probably are underfunded, because the government just like to pretend they pay for the spaces. The costs are equal and fair for everyone and no one is charged an hourly rate.

I'm worried about what will happen to nurseries if the 30 hours of 'free' childcare is implemented. If they are forced to fold as they can't cover their costs, where will people send their children so they can work?

The government are making out they are helping, but it's going to make things much worse for people reliant on childcare.

Can't see anyone getting the 30h to be honest. It will be down to local councils to share out, so David Cameron will say yes funds are there then not ring fence it and leave the vultures fight over it.

If they hadn't closed hundreds of sure start nurserys be no bother.

I think using the term "15 free hours" is confusing & misleading. It's only "free" if your DC goes to a school nursery for 15 hours a week during term time with no wrap-around.

I prefer to think of the funding as a lump sum, divided over the year, which will reduce nursery costs overall.

I'm in Scotland & IIRC the funding is about 2k a year. So it will definitely a help for me when DD is 3.

My nursery will just reduce my monthly bill by the amount it receives from the government, divided over 12 months. I pay the remainder. DD will still be there the same amount of time.

monihuna there are truly free places around here and I'm sure it is your way too. They are run in community halls, provide no hot meals, and run a few hours in the morning and then another few hours in the afternoon. The really popular one local here does not even give all 15 hours to a single child as it's very oversubscribed. I know a few working parents who use it with a full time nanny.

Well that's another way you can claim your truly free hours if you insists. Otherwise just be thankful your overall fee is lower than before.

Doh and yes you mentioned your nursery can provide it for free if you do only 15 hours? Then hire a nanny and get her to do pick up and drop off then!

Our nursery is similar. If DD didn't like it so much we would switch as others in the area offer much better application of the free hours.

I can only claim 3 hours a day. As I'm not "buying" a full session (because I'm having some free hours) I don't get a full session discount and the hourly rate goes up. With my free hours, I only pay about £25 less a week on three days.

Putting her in for just three hours, or reducing down from a full day isn't allowed as they have to go 8-6 and while I can pick her up early I still have to pay.

Other nurseries locally would let her go just for 12 hours with no charge at all but she likes the one she is at ...

Nobody is forcing you to use this nursery. If money is the most important factor in who looks after your child then by all means move to somewhere that charges less.

Good staff in sufficient numbers, and a good quantity and quality of educational toys, all cost money. If a nursery gets £58 per 10h day that will allow them to give a level of service which can't be achieved if they get £41 per 10h day. So you are free to choose to either keep the quality and pay a bit more or move somewhere cheaper. It is entirely up to you.

" How do you know the £3.74 from the LAs do not really cover the costs of an hour of a bit of singing, dancing and crafting for one child?

Staff costs
Rent
Lighting
Heating
Insurance
Resources
Water rates
Staff training
DBS checking
1:1 support for relevant children (not fully funded by LA)
Printing & photocopying
Accounting/auditing costs
Cleaning costs

This is just a suggestion of the most obvious costs a nursery or childminder setting.

If you want your child to do "an hour of a bit of singing, dancing and crafting" then you need to take them to a playgroup and stay with them.

The government money is much less than the nurseries normally charge. They are not supposed to charge at all for the ' free' hours so they increase the cost of the other hours to compensate. It's just an accounting fudge because they are not allowed to say 'we'll knock the government contribution off your bill'. You are free to vote with your feet and go to somewhere that truly does free sessions, but that will be a preschool offering a 3 hour session then expecting you to collect your child.

@Akire and @Littlefish, of course I realise the nursery has a lot of expenses than just the staff, I am not so detached from reality. But for all of this I now do pay the NORMAL rate which was set up for all the parents equally! It's only when my child moves to the funding scheme I am all of a sudden charged a lot MORE than the normal rate which really annoys me. Obviously the nursery can manage with me paying the normal rate now so I believe I should be charged the same rate in a few month's time as my child will be doing the same number of hours as now, the same things, eat the same food and do the same activities.

I have figured it out by now that they are cheating by adding top-up fees on top of normal rates as they think they can away with this. They are not allowed to charge top-up fees parents whose children only come for the "free" hours so they inflate the fees for working parents who can't send their children for "free" hours only. I can't send my child for 15 hours only as me and my husband work. This is not a lifestyle choice, we have to work to pay the mortgage and bills! So I find the inflated fees very unfair and penalising, just because I want to work to pay my bills, not stay at home and be on benefits. But it seems that there is nothing I could refer to when challenging this? Any Code of Practice of some sort? This is so frustrating...

Just organise other wrap around care cheaper if you find this to be overcharging, then use the free hours at nursery only.

The nursery is a private business and not a charity. The money the government gives them isn't enough to cover their hourly rate, so they have to make it up somehow. The alternative is that they stop giving the "free" hours.

But you've accepted that the nursery can manage on normal rate, so why should they try and manage on less when the government starts paying them below their normal rate? You are subsidising the government, not the nursery or the other children.